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Either to become an employee and work in an established business or organisation to a set contract for defined hours and wages or go through the process of company registration to start your own business and hopefully become a successful entrepreneur.

This article looks at some of the ups and downs, opportunities and pitfalls of both options.

Financial

Entrepreneur:

Cons:  The average time it takes for a new business to become profitable is 2-3 years, and this can be a time of great financial uncertainty and reduced income.  While new business owners usually do draw some level of salary from their company,  it is good practice to keep this to a minimum and reinvest most of the net revenue generated back into the business to ensure its growth.

You may find, during the growth phase of your business that you are forced to use personal savings for general living expenses, so, in the short-term at least, your financial situation may deteriorate before it improves.  This financial uncertainty is one of the main deterrents for  people considering starting their own business.

Pros:  If you are working for yourself, you will  have a personal interest in the finances of your company, so you are likely to be much more vigilant and proactive in taking the necessary steps to ensure the financial health of your business.

In  the longer term, as the owner of a successful business, a self-employed entrepreneur may have far greater  earning potential for wealth, than an employee working for a defined wage, for their whole career.

Employee:

Pros:   A stable, regular, guaranteed income is one of the main reasons people take up employment rather than becoming an entrepreneur.  This allows them to budget and plan ahead to meet their financial needs within  predictable resources.

 Cons:  If you choose to stay in employment for somebody else, throughout your working career, however well paid you are, your earning potential is limited to what your employer pays you. The worlds wealthiest people are entrepreneurs not employees, think Bill Gates, Richard Branson, James Dyson, Warren Buffet.

Job Security

Entrepreneur:

 Pros: As an Entrepreneur, you will have the security of owning the business and as long as it performs well you will always have work. 

Cons: The downside of this is of course, if the business fails or does badly, you may find yourself unemployed and without an income.

There are some forms of self-employment that do not promote job security; in the so-called gig economy, individuals who operate on a self-employment status for tax and benefit purposes are mainly contracted to one particular company on a job by job basis.  Some better known examples are Uber taxi drivers and Deliveroo food couriers.

This type of work can be advantageous for those who wish to work part-time and like the flexibility of choosing where and when they work, but the unpredicability of work and income can be a major stress for many people.

Employee:

Cons: The emergence of part-time, short-term and zero hour contract jobs in recent times, where  staff are  not even guaranteed minimal hours but must be available for work when needed has had a severe impact on job and income security.

As an employee, you have no control over external or internal factors that may cause your employers business to fail and lead to job losses.

Pros:  if you are a public sector employee paid by the government or if your job is in a reputable and well established company or organisation,  you will have a high degree of security in your job, with a decent wage which is likely to last your working lifetime.

Benefit Entitlements

Entrepreneur:

Cons: As a self-employed business owner, you will not benefit from paid annual leave, maternity benefit, parental leave or health insurance benefits.  When you are growing your business, if you are not working, you will most likely not be earning, so you may find it very difficult to take time off.  You will also be responsible for setting up and paying your own health insurance and pension fund.

Pros: As your business grows and becomes more successful, you will be in a postion to secure any benefits you need for yourself, and you will not be restricted by the rules and regulations of your employer. If your business does well, you can use profits to generate a lucrative pension fund for  yourself.

Employee:

 Pros: There are certain minimal statutory entitlements that you have as an employee;  paid annual leave, maternity leave and parental leave, most employees pay a contributory pension and many companies also pay or subsidise private health insurance.

Cons: Even though you have the above statutory entitlements, they are in most cases minimal, restrictive and taken at the discretion  of your employer.

Autonomy

 Entrepreneur;

Pros: As an entrepreneur, you have complete control over your own businesses, you get the final say on all decisions that relate to your business.

Cons: This can be a difficult place to be sometimes, as all responsibility also lies with you if you make a mistake or a bad decision.  You may also find yourself in a position where you have to make unpopular decisions such as letting staff go.

 Employee

Cons: You may have very little control over what you are expected to do on a day to day basis and may find yourself forced to go along with things you may not necessarily agree with.

Pros: You don't have to worry about making any big decisions that will impact others, you can just get on with the day to day tasks in your job and leave work behind at the end of the day.

Risk

 Entrepreneur:

Cons:  It may be necessary when starting a business, to use your own savings or to borrow money either from family or friends or a financial insitutuion to get the business up and running.  If the business does not become successful,  you may find yourself severely in debt.  If you are not protected by limited liability, you may be forced to sell your personal assets, in some cases, including the family home to pay your creditors.

Pros:  On the other hand if you risk investing your money in a business that becomes very successful, you may have  much higher return on your investment than you would by just saving your money or investing in stocks and shares.

 Employee:

Pros: If you have a job with a regular income, and you are able to save and invest your money, you are likely to have a small but guaranteed return on your investment.

 Cons: Low risk investment usually leads to low return.

Work-life Balance

Entrepreneur

Cons: As an Entrepreneur, you may end up working longer hours, it may be difficult to schedule time off, and to plan ahead for leisure activities.  Even when  you are off, you may be required to respond to important business related phone-calls or emails,  and your family may see less of you than if you were in a job with regular hours.

Pros: Even though you may be working longer hours overall, as the business owner, you will have the flexibiltiy to work when it suits you and you can attend to personal tasks during the working day if you wish.

Over time, as your business becomes more established and secure, you will be able to take more time off at your own discretion and can hire employees and delegate some of your responsibilites to them.  The majority of business owners say they do not mind the longer hours when they are working for themselves.

Employee

Pros: You know in advance what your working hours are, so you can plan your leisure time as you please, to spend time with friends and family.

Cons:  In many cases, while this may be true in theory, it is often not the case in reality, in increasingly competitive work environments many employees find they are working longer hours in the office and feeling obliged to be available online or on the phone when they are out of the office, this can have a negative impact on quality of life especially as it is for someone else's benefit rather than your own.

Workplace Relations

 Entrepreneur:

Cons: In the beginning, you may be working alone, this can be difficult when you have no-one to discuss difficulties or share successes with particularly if you have worked as part of a team in the past.

 If you do have staff, there is a significant amount of responsiblity attached, you need to ensure that your are up to date and compliant with all areas of employment law and it will be up to you to resolve any staff conflict situations that may arise.  Many business owners find staff management to be one of the most complex parts of the job.

Pros: One of the main attractions to the world of entrepreneurship is in becoming your own boss, you are not answerable to anybody and have no-one telling you what to do and you get to choose your staff.

 Employee:

Pros: As an employee, you are usually part of a staff team, for most employees one of the best parts of the job is the camarderie with work colleagues, who can become almost like a second family.

Cons:  If you have difficulties with your boss or work colleagues, it can make life very difficult, and if you cannot find a resolution, you may be forced to seek alternative employment.

Impact

 Entrepreneur

Pros:  As an entrepreneur , you have the opportunity to realise a dream of having a positive impact on the world around you, by creating or innovating a service or product that improves people's lives. This is the driving force for many entrepreneurs

 Cons:  If the product or service you create or believe in is not appreciated or understood by the market, it can be very upsetting and disheartening.

Employee:

Cons: As an employee, there is less opportunity to make a personal impact on the world as you are part of the process of someone else's agenda and not  your own. You may also find yourself in a position where your own personal values may be in conflict with the job, e.g if you are environmentally conscious person working for a company that produces large quantities of plastic waste.

Pros: You can as an employee seek work in organisations that align with your personal values, and in this way have a positive impact on the world.

Personal Growth and Satisfaction

Entrepreneur:

Cons: There is a certain amount of pressure to always be moving forward and keeping up to date with the latest developments in your industry and this can be stressful.

Pros: As the owner and founder of a business, you have the opportunity to decide to follow your passion and make a job out of what you love to do.

You have a sense of purpose and achievement and the satisfaction of knowing that you are doing what you want to do and on your own terms. 

In doing what you love you will experience a high level of engagement and mental absorption in your daily routine, which greatly increases personal happiness and satisfaction.

As an entrepreneur,you will always have opportunties for exploring, learning and discovering new and better ways of doing things.

Employee:

Pros: Some employers are excellent at sharing their mission with employees and encouraging everyone to work towards a shared vision, ensuring the the staff also achieve a sense of satisfaction for success of the company. 

Many employers too,actively encourage learning and growth within employee roles, by providing training courses, subsidising further education and rewarding employees for achievements.

Cons: You may find yourself doing menial tasks that have no personal purpose or meaning, leading to low levels of engagement and personal satisfaction.

You may be in a stagnant environment which does not promote or encourage employees to improve themselves by acquiring new knowledge and skills, so there is no sense of growth or achievement within the job.

There are positives and negatives to both the option of being an employee or an entrepreneur, only you can decide what is best for you.

Entrepreneurship does not suit everybody, many people would be unable to cope with the stress, uncertainty and risks that come with owning your own business.  However, if  you can handle these stresses then there is no better way to make a living than to set up and register your own company so you can make your mark on the world.  In the words of Tony Gaskin:

"if you don't build your dream, somebody else will hire you to build theirs"